Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107451
Authors: 
Braun, Eduard
Year of Publication: 
2013
Series/Report no.: 
TUC Working Papers in Economics 10
Abstract: 
This paper critiques Rothbard’s ([1962] 2004) concept of gross investment. Rothbard introduced the concept in order to demonstrate his point that it is not consumer spending that primarily drives the economy, like the mainstream Keynesian view maintains, but the capitalists’ spending. In this paper, it is argued that, contrary to Rothbard’s opinion, the amount of gross investment as he defines it does not contain significant information concerning the question as to whether the capital structure of a society can be upheld or not. Instead, it is an arbitrary figure that depends on the length of the different stages of production. This problem has not been recognized by Rothbard because his exposition rests upon the assumption of an equal time-length for all stages. Apparently, he has been led astray by his intention to find arguments against the importance of consumer spending in the determination of output.
Subjects: 
Gross Investment
Murray N. Rothbard
Structure of Production
JEL: 
B53
E22
E23
Document Type: 
Working Paper

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